London House Prices: Hackney Leads the Way with the Highest Rise in the Capital
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17 FEBRUARY 2017 ; NOT FOR BROADCAST OR PUBLICATION BEFORE 00.01 HRS FRIDAY 17 FEBRUARY 2017 London house prices: Hackney leads the way with the highest rise in the capital Gap in average house prices between London and England and Wales has significantly widened over the past 20 years Kensington & Chelsea and Westminster remain most expensive but the capital’s more affordable boroughs record strong growth London house prices now nearly 12 times average earnings Private housing stock in London now worth £1.27 trillion The North East London Borough of Hackney has seen the steepest growth in house prices in the capital over the past 20 years, according to new research by Lloyds Bank. The average house price in Hackney has increased £530,700 (702%), from £75,569 in 1996 to £606,269 in 2016. This compares to the average increase of almost 450% for London and 290% in England and Wales over the same period. The sharp increase in Hackney has seen it shoot 16 places up the list of house price increases for London boroughs, from 28th in 1996 to 12th in 2016. Homes in Westminster have seen the next largest increase in average prices over the past 20 years, from £190,438 (1996) to £1,424,388 (2016) – an increase of 648% - followed by Southwark (626%) (Table 1). However, the report also reveals that prices in London’s more affordable boroughs have also recorded strong price growth. Waltham Forest (617%) and Newham (612%) were among the six least expensive boroughs in 1996 but have now moved to one of the top five performing areas. House prices in these areas have been boosted by the Olympic regeneration programme and improved travel links via the Dockland Light Railway (1987) and the Jubilee Line extension (1999). Mike McPartlin 07795 316090 [email protected] 16 FEBRUARY 2017 Price gap widens across England Over the past 20 years, the gap in average house prices between London and the average for England and Wales has widened from a difference of £33,834 (or 47%) in 1996 to £299,631 (or 107%) in 2016, with London’s ‘Prime’ boroughs - Kensington & Chelsea, City of Westminster and City of London - having pulled even further apart. Prices are now 5.72 times the England and Wales average, in comparison to 3.34 times in 1996. The total value of private housing stock in London has also seen a surge. In 1996 it was £201.8 billion, increasing nearly six and a half fold (529%) in 2016 to £1.27 trillion. Andrew Mason, Lloyds Bank Mortgage Director commented: “The last 20 years have seen substantial growth in house prices in London, especially in the most affluent areas of the City. The boom years between 1996 and 2008 saw the gap widening between house prices at the top end of the market and those in London’s inner and outer boroughs, creating two distinct markets1 – ‘Prime’ and ‘Mainstream’. “However, whilst those boroughs at the top end have pulled away considerably from the rest of London and the country in terms of house prices, improved transport links to the city from the outer boroughs and the 2012 Olympic Games has meant that the boroughs directly benefitting from these have seen house price growth outpace the Prime areas in recent years.” The best performing London Boroughs Between 1996 and 2016, 20 boroughs have seen average house prices increase by over £400,000. Kensington and Chelsea has seen the largest increase in monetary value, where the average house price has grown from £297,768 to £1,857,287 – an increase of £1,559,518 (524%) and equivalent of £6,498 per month. The next best performer is Westminster where the average value has grown by £1,233,949, followed by Camden (£887,658). These three boroughs along with Hammersmith and Fulham have consistently been London’s five most expensive areas over the past 20 years. In 1996, average house prices were under £100,000 across nearly two thirds (64%) of London’s boroughs - fast forward 20 years and average prices are now more than £500,000 for over half (58%). (Table 1) The ten most expensive places to live in London remain largely unchanged compared to 1996. The key exceptions are Southwark, which has moved up ten places to ninth spot and Haringey Mike McPartlin 07795 316090 [email protected] 17 FEBRUARY 2017 which moved up two places to tenth. Barnet and Kingston-upon-Thames have dropped out of the top ten. Biggest Movers Whilst Hackney is the bigger climber on the list, Bromley in Greater London has fallen most in the league table, dropping seven places from 14th in 1996 to 21st in 2016. London house prices are now nearly 12 times average earnings Average earnings2 in London have failed to keep pace with the rise in house prices over the past 20 years. In 1996, the average price to earnings ratio in the capital was 3.9. This had risen to 11.6 in 2016. The least affordable borough both 20 years ago and today is Camden, with a ratio house price to average earnings of 6.2 in 1996 and 20.0 in 2016. The most affordable borough in 2016 was Bexley (7.4) followed by Havering (7.7). -Ends- NOTES TO EDITORS: The prices in the following tables refer to the arithmetic average of house prices. The data has been extracted from the Land Registry for 12 months to December each year. 1 London borough definitions: Prime: Kensington & Chelsea, City of Westminster and City of London (not officially classed as a borough but included in this analysis). Inner: Camden, Hackney, Hammersmith & Fulham, Islington, Lambeth, Lewisham, Southwark, Tower Hamlets and Wandsworth. Outer: Barking & Dagenham, Barnet, Bexley, Bromley, Brent, Croydon, Ealing, Enfield, Greenwich, Haringey, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Merton, Newham, Redbridge, Richmond upon Thames, Sutton and Waltham Forest. 2 The price to earnings ratio is calculated using the ASHE data for full time male employees for years 1996 and 2016. Average earnings refer to mean values. Mike McPartlin 07795 316090 [email protected] 16 FEBRUARY 2017 NB: No data available for City of London earnings. Lloyds earnings estimate for the following local authority districts: Kensington & Chelsea, Richmond upon Thames, Hackney, Merton, Brent and Redbridge. Mike McPartlin 07795 316090 [email protected] 17 FEBRUARY 2017 Table 1: London Local Authority District Growth: 1996 to 2016 Average Average House Price P/E Ratio House Price P/E Ratio 20 Yr 20 Yr Local Authority District 1996 1996 2016 2016 Change £ Change % Hackney 75,569 3.3 606,269 14.2 530,700 702% Westminster 190,438 6.1 1,424,388 18.5 1,233,949 648% Southwark 87,559 3.4 636,040 14.0 548,481 626% Waltham Forest 60,388 3.1 433,105 11.4 372,718 617% Newham 50,077 2.4 356,638 10.2 306,561 612% Lewisham 62,770 2.9 439,811 10.4 377,041 601% City of London 136,344 n/a 908,759 n/a 772,415 567% Brent 82,698 3.9 549,704 14.0 467,007 565% Wandsworth 120,481 5.3 758,034 10.4 637,553 529% Camden 169,047 6.2 1,056,705 20.0 887,658 525% Kensington and Chelsea 297,768 3.3 1,857,287 11.2 1,559,518 524% Lambeth 95,642 3.7 593,542 14.3 497,900 521% Haringey 102,533 5.1 622,944 14.8 520,411 508% Hammersmith and Fulham 150,561 5.6 914,478 13.7 763,917 507% Islington 124,754 4.6 753,673 12.1 628,918 504% Merton 104,019 3.9 606,295 12.1 502,277 483% Tower Hamlets 88,672 3.1 513,092 10.0 424,420 479% Greenwich 76,073 3.6 433,742 9.0 357,670 470% Ealing 97,605 4.2 549,489 13.2 451,884 463% Barking and Dagenham 51,628 2.2 285,129 9.1 233,500 452% Enfield 82,953 3.8 446,322 11.0 363,370 438% Harrow 94,457 4.0 507,698 11.3 413,241 437% Barnet 111,203 5.2 595,756 12.2 484,554 436% Hounslow 92,115 4.0 492,561 12.4 400,446 435% Richmond upon Thames 150,258 3.8 797,959 11.0 647,701 431% Redbridge 80,572 3.2 425,028 9.0 344,456 428% Hillingdon 84,187 3.2 443,599 10.3 359,412 427% Kingston upon Thames 106,789 4.3 552,473 10.1 445,683 417% Croydon 75,657 3.6 377,257 8.9 301,600 399% Bromley 97,554 4.7 481,733 8.1 384,180 394% Sutton 79,578 3.6 392,297 9.3 312,718 393% Bexley 69,925 3.3 343,093 7.4 273,168 391% Havering 79,603 4.2 359,895 7.7 280,292 352% Prime London 238,632 - 1,593,913 - 1,355,281 568% Inner London 106,590 - 619,956 - 513,367 482% Outer London 89,956 - 486,043 - 396,087 440% London 105,266 3.9 578,381 11.6 473,115 449% England & Wales 71,433 3.5 278,750 7.2 207,317 290% Source: Land Registry, 12 month rolled data to December, ASHE full time male data. Mike McPartlin 07795 316090 [email protected] 16 FEBRUARY 2017 Table 2: House price league table: 1996 and 2016 Average Average House Price House Price Change Local Authority District 1996 Local Authority District 2016 in Rank Kensington and Chelsea 297,768 Kensington and Chelsea 1,857,287 0 Westminster 190,438 Westminster 1,424,388 0 Camden 169,047 Camden 1,056,705 0 Hammersmith and Fulham 150,561 Hammersmith and Fulham 914,478 0 Richmond upon Thames 150,258 City of London 908,759 1 City of London 136,344 Richmond upon Thames 797,959 1 Islington 124,754 Wandsworth 758,034 1 Wandsworth 120,481 Islington 753,673 1 Barnet 111,203 Southwark 636,040 10 Kingston upon Thames 106,789 Haringey 622,944 2 Merton 104,019 Merton 606,295 0 Haringey 102,533 Hackney 606,269 16 Ealing 97,605 Barnet 595,756 4 Bromley 97,554 Lambeth 593,542 1 Lambeth 95,642 Kingston upon Thames 552,473 5 Harrow 94,457 Brent 549,704 6 Hounslow 92,115 Ealing 549,489 4 Tower Hamlets 88,672 Tower Hamlets 513,092 0 Southwark 87,559 Harrow 507,698 3 Hillingdon 84,187 Hounslow 492,561 3 Enfield 82,953 Bromley 481,733 7 Brent 82,698 Enfield 446,322 1 Redbridge 80,572 Hillingdon 443,599 3 Havering